Ruth Ann Dailey: Land banking: people power or greed fest?

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It's a strange day in Pittsburgh when a city bureaucrat expresses more concern for taxpayers and free markets than I do.

But that was the case Friday when I called Ed Jacob at the city real estate department about a property my community group has its eye on. I made the mistake of using the term "land banking."

Mr. Jacob mock-growled, "You better not use that term around me any more!"

My "What?!" led to a sometimes heated but friendly exchange that I imagine will be happening all over Pittsburgh for weeks to come. And we should argue: There's a lot at stake.

District 7 Councilwoman Deborah Gross recently introduced legislation that would supposedly improve the process by which tax-delinquent properties are seized, legally unfettered, sold and returned to city's tax rolls.

Land banking. Land recycling. Call it what you will -- it's tough, slow work.

I confess to being confused early on, because land banking is already legal and practiced successfully in this city. You spot a vacant property you're interested in, check its tax status, request the city to foreclose and then wait.

"You" can be an individual, business or community organization. The city has to approve you as a buyer -- no delinquent taxes, no unpaid water bills, etc. -- and once the sale process begins, the Law Department has to ensure, through the "quiet title" process, that the property is clear of any claims. In recent years the process has gotten slower -- as long as two years. The city moves 200 to 300 properties to sale each year.

So how would this new legislation facilitate this process?

It calls for creation of a new "authority" to which the city would cede the power to seize, clear and selectively sell tax-delinquent properties. But since all the same, slow legal work would still have to be done, it's not clear how creating a new bureaucratic structure led by an unelected authority would be a better system.

Those who, like me, initially worried that the well-crafted revitalization strategies of the city's many community organizations now might as well be bird-cage liners need not fear: The people behind this push are my fellow community organizers.

Or to put it Mr. Jacob's way: "This is a land-grab by the community development corporations!"

Dozens of these good souls attended Thursday night's four-hour-plus marathon hearing in City Council chambers. The overflow of people into the lobby, waiting to speak, "means there's a good discourse taking place," said Nate Hanson, Ms. Gross' chief of staff.

Maybe. As he observed, people certainly are coming at this from many perspectives. I'd originally intended to speak for my group and was startled when the city employee who fielded my call asked "For or against?" Like many of those who did weigh in, I have mixed feelings. Not so the gentleman who called this idea "theft" and decried his local CDC as money-wasting and secretive.

Several speakers were alarmed there's no prohibition against seizing an owner-occupied home if the owner owes back taxes. (What about our vulnerable elderly on fixed incomes?)

I had to miss the hearing, so I caught the Saturday rebroadcast on TV. From what I saw, there is another big lapse in the thinking to date:

As Mr. Jacob asserted, it seems nobody has sought input from those who make the current process work on behalf of all taxpayers -- that is, the real estate department and city treasurer.

From where they sit, the CDCs can act quite irresponsibly. Some were approved to buy certain parcels years ago -- even a decade ago -- and have chosen not to close, avoiding taxes while tying up the properties. Is that fair to other taxpayers or buyers?

Even more important, CDCs pay far less for property than private individuals or businesses do.

"I sold 20,000 square feet -- four empty lots -- in Garfield last week for $19,000" to a private buyer, Mr. Jacob said. A CDC would have paid $100 for each lot, plus closing costs. Again, which alternative is better for us taxpayers?

In the current back-and-forth among bureaucrats, city council members, CDCs and rank-and-file citizens, would-be buyers are almost equal -- with a little advantage to the CDCs, thanks to vigilant council members and the city's "land reserve" option.

Sure, an authority can tackle the tax-delinquent backlog if we throw lots of money at it -- but we've never adequately funded the system we have!

And since, in general, the further removed a process is from the voting booth, the more likely it is to be abused, we need to give this one a lot more serious thought.

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